| | Home>Banking & Investment>Bank Indonesia Regulation | |  |  | | | December 1‚ 2008 | | | Re: Bank Indonesia Circular Letter No.10/42/DPD/2008 | | | Purchase of Foreign Currency vs IDR through Banks | | | Dear Valued Client‚ | | | With reference to Bank Indonesia Regulation No. 10/28/PBI/2008 issued earlier on November 13, 2008, the Central Bank issued the regulation regarding on “Purchase of Foreign Currency vs Indonesian Rupiah through Banks” in its Circular Letter No. 10/42/DPD/2008. | | | Please find below a summary of this regulation on foreign currency outflows, which applies to local customers and foreign parties: | |  | Entity |  | | Local Customers | | | - Individuals with Indonesian citizenship (WNI)
- Locally incorporated company (non bank) domicile in Indonesia owning tax ID (NPWP)
| | | | Foreign Party | | | - Foreign citizens
- Foreign entities or foreign institutions
- WNI with offshore PR status and not domicile in Indonesia
- Offshore branch of local bank
- Offshore branch of locally incorporated company
| | | | Underlying Transaction | | | - Economic activities as reason for purchase of FCY vs IDR
| | | | | | Definition of terms (related to the regulation):Bank Indonesia Circular Letter No.10/42/DPD/2008 stipulates that purchases of all Foreign Currencies against the Indonesian Rupiah can only be performed for NON SPECULATIVE purposes. | | | The following are documentation requirements for the different type of transactions: | | | Type | | | Details | | Requirement | | Effective Date | | | Purchases of FCY vs IDR for
LOCAL CUSTOMERS and FOREIGN PARTIES
UP TO USD 100,000/- per month/customer/all banks in Indonesia | | | - All transactions including via ATM, phone banking, e-banking and credit card
- Speculative transactions, which are not allowed, include , but not limited to, structured products that combine asset and foreign currency derivatives, which may induce purchase of foreign currency i.e. Dual currency deposits, Callable forwards
| | - Customer provides written declaration with stamp duty to Bank
- Provided written declaration must consist following Information: Name/identity, Bank’s name, Amount, statement declaring that purchase does not exceed USD 100,000 or equivalent per month/customer in all Indonesia banking system
| | 11/13/2008 | | | | | Purchases of FCY vs IDR for
LOCAL CUSTOMERS
ABOVE USD 100,000/- per month/customer/all banks in Indonesia | | | - Transactions include spot, forward & other derivatives
- Transactions spot include today, tomorrow, bank notes, transfer from IDR to FCY account, credit card, ATM, e-banking, phone banking
- Speculative transactions, which are not allowed, include , but not limited to, structured products that combine asset and foreign currency derivatives, which may induce purchase of foreign currency i.e. Dual currency deposits, Callable forwards
| | - Underlying documentation, NPWP & Customer ID, statement letter with stamp duty stating that underlying document is legitimate and FCY transaction will not exceed amount states in the underlying document
- Example of underlying documents:
- copy of LC
- invoice
- PIB
- loan agreement or other documentation
- Invoice of asset purchase
- account statement in FCY
- “bilyet” deposit
- employment contract agreement
- estimation of tuition and living expenses
- estimation of medical expense
- estimation of traveling expenses
| | 12/1/2008 | | | | | | | Client confirmation statement of underlying transaction must be submitted along with transaction instructions to Citibank. Incomplete client documents will result in delays in transaction processing and settlement. | | | Please note that transactions performed prior to issuance of PBI 10/28/PBI/2008 dated November 13, 2008 and have not matured at the issuance date, are not subject to requirements set forth in this regulation. However, rollover transactions performed after November 13, 2008 must comply with the above requirements. | | | If you have further questions or require more information, please contact your Citibank Relationship Manager or Citiphone Banking 24 hours at : | | | Jakarta (021) 252-9999 | | | Bandung (022) 420-9999 | | | Semarang (024) 831-1999 | | | Surabaya (031) 547-9999 | | | Medan (061) 456-9999 | | | Bali (0361) 26-9999 | | | Sincerely | | | Citibank‚ N.A - Indonesia Branch | | | | |
